MTD Cap buying its 'undervalued' shares in open market

The share buyback thus far is reflective of the board and management's assessment of the company's valuation, says its managing director 
 
MTD Capital Bhd (9032), the country's second largest highway operator, has been buying its own shares from the open market as it feels they are undervalued, said its managing director Datuk Azmil Khalid.

"The share buyback thus far is reflective of the board and management's assessment of the company's valuation," Azmil told Business Times.

Based on the stock's closing price of RM4.30 yesterday, the group is valued at RM1.18 billion.

As at February 24 this year, MTD had 193,432 treasury shares or shares that it bought back in the open market. But it had since beefed it up significantly.
Filing to the stock exchange showed that as at June 28, MTD has 22.38 million treasury shares, or 8.14 per cent of the company's capital spread.

In Malaysia, public-listed companies are only allowed to repurchase up to 10 per cent of their shares.

MTD now has a paid-up capital of 275 million shares issued at par value, having twice this year reduced this by cancelling its treasury shares.

Azmil said the share buyback programme allows the group to undertake a more effective capital management.

MTD cancelled 2.2 million treasury shares in February, and subsequently in May, it axed another 7.8 million treasury shares.

By Francis Fernandez

Business Times